Investment Articles

Everyone has heard about a friend of a friend who knew a guy that had a sister who got involved with a company just before they went public, made a small seed investment and when the company went public she made millions.

Real Pre – Public investments in companies that are built to last with solid executive management and board of directors all wrapped in a industry that can still flourish in a recession are extremely difficult to find and impossible to be part of unless you are ‘in the know’, meaning you are the auditing or contract attorney for the company filing with the SEC, the accounting firm doing the third party audit, the consulting firm who is putting together the corporate strategies for the company or the investor relations industry that is gearing up for the publicity and promotions campaign to run in a post offering environment.

Typically the invitation to invest in a pre-public company comes in the form of a Direct Public Offering after the company is divided into shares with a private placement memorandum and before the third party audit and before and during the comments stage of the S1 filing. If you are fortunate enough to invest in a company with the above description you will most likely being offered deeply discounted stock (cheaper than what will be offered in the public market) which means you will (if the offering goes as planned) increase your initial investment amount by 200+ percent.

This is not at all a rare instance. Getting invited to invest in the pre-public, seed capital stage is actually quite simple if you know who to talk to. The best companies to become aligned with are ‘go public’ facilitation consultants and corporate turnaround consultants. These groups take companies public for a living and can usually plug you right in when the company is qualifying with the SEC and needs to have 40 investors on the book to qualify to go public (on the OTCBB). Simply contact the company and they will typically give you a quick information form to fill out to collect your name, phone, investment history and investment threshold.

It’s a fact, once you started investing in solid pre-IPO stock investments, you will dump your broker and never buy stock the traditional way again. Now get out there and experience the power of seed capital investment!

Are you an investor that wants to feel the power of a Pre IPO investment first hand? Are you interested in investing in up and coming technology companies, alternative energy companies with massive contracts to fill, Chinese companies with incredible capabilities that are now expanding to the US public marketplace? Then you need to start getting emails from Princeton Corporate Solutions. Get updates on the latest IPO’s a few months or even weeks before they go public. Click Here to get more information: http://spreadsheets.google.com/viewform?formkey=dEl2aEhJLXZIYmhfbUp6VWVqTURnUmc6MA

Covered calls are a conservative option trade that typically outperforms standard stock trading strategies in the majority of markets. The reason is because covered calls draw out profits from speculators while collecting a premium on the trade and holding onto the stock for dividends. Since you have multiple sources of profit in the trade, you have the opportunity to make money when the stock goes up, down or sideways.

For those who don’t already know, writing a covered call involves buying 100 shares of stock and then selling the call option on those 100 shares 1 or 2 strikes out of the money in the front month. This lowers your initial investment in order to own the stock and gives you multiple sources of profit.

Covered calls are an options trade best played on equities that are mild to moderately bullish in nature. A covered call outperforms standard stock trading strategies only when the market is mildly bullish or neutral. When the market rallies, writing covered calls will dramatically cut into your profit margins because you will get exercised against and be forced to sell your shares at a smaller than possible profit.

Here are some of the things I look for in writing a covered call:

1. 3-5% ROI from the premium. Assuming the stock doesn’t change in price during the trade, you should have made 3-5% of the value of the stock on the money gathered in the premium. Aim too high and you risk a lot. Aim too low and you’re hardly making any money.

If your profit margin is too high, it’s a sign that there is a great deal of speculation and volatility associated with this particular stock. You do not want to be buying a covered call on a stock that has a 6-10% ROI from the premium each month. The reason is because you risk things like catastrophic gapping from sudden news announcements or dramatic bullish breakouts that cut into your profit margins upon being exercised. Avoid this and play it safe with a smaller monthly ROI.

2. A stock should be trading above its 200 day exponential moving average for at least a month. Typically the 200 day EMA is the benchmark of whether an asset for an options trade is in an uptrend or a downtrend. Look to this as your primary technical indicator when determining a stock to write covered calls on.

3. A stock should have a Price to Earnings Ratios between 15 and 25. The price to earnings ratio measures a company’s earnings versus the value of each share of stock in the company. It’s an indicator of how valuable a company is, the lower the number, the better the earnings per share and the more profitable and growth oriented a company is. The higher the number, worse the earnings are per share and the more overvalued a company is. Companies with P/E Ratios above 30 are usually the result of mass speculation without much earnings to show for it.

You should expect a company to be moderately to well valued to place a covered call on it, so don’t look for the undervalued companies ready to explode or the overvalued companies preparing to crash. Try to stick somewhere in between.

4. A stock should have a relative strength index between 45 and 70. Relative strength is the measurement of the overall amount of upswings in price action versus the overall amount of downswings averaged out over a period of time. When the average number rises above 70, the position is considered overbought and values below 30 are considered oversold.

I recommend staying in between 45 and 70 to make sure you are dealing with a stock that has a positive outlook, but isn’t going to explode off the chart any time soon. This will help make sure your options trade isn’t getting cut out of profits by being exercised and is still performing well without losing equity in the market.

For more tips and options trading strategies like this one, be sure to check out http://www.tamingthemarkets.com

-Eric Conklin
Blogger and Trader
http://www.tamingthemarkets.com

While the term “leveraged debt” may seem unfamiliar to you, it is a fairly common practice in personal finances as well as business finances. The term refers to a scenario when a person or business chooses to make a large investment with the help of various financial resources, including borrowed capital. Leveraged debt is used to increase returns on an investment; however, there are serious risks involved.

Examples in Business and Personal Finances

The most common uses of leveraged debt include business, stock, and real estate investments.

In business, leveraged debt is a tool used to magnify returns on large scale operations. For example, if a company has only $1 million in equity, but they believe they can profit from funding a $10 million operation, they may use “borrowed capital” to fund the remaining $9 million. In this scenario, the company is trusting that their operation will be successful enough to make a considerable profit, even after repaying the $9 million in loans.

In personal finances, it is common for people to use leveraged debt when investing in the stock market. For example, if a person feels confident in their ability to do well in stocks, but they do not have the cash they need to purchase shares, they may take out a loan to for the initial investment. If a person borrows $1,000 and invests it with a return of $5,000, they have earned 500% profit.

Purchasing a home is another investment in which people frequently use leveraged debt. For example, if person wants to buy a $100,000 home, but only has $20,000 for a down payment, they make take out a loan for the remaining $80,000. Once they make the purchase, they can begin to rent out the home for, let’s say, $600 a month. After renting out the house for a just two years, they have gained $14,400 in rent. Additionally, if the real estate market does well, their profit margin can increase even more.

Risks Involved

Leveraged debt can significantly increase your investment’s returns; however, it can also increase your losses. When relying on borrowed capital, it is important to thoroughly research your investment, because if it fails you will still be held accountable for the debts you owe, which can often be quite substantial. In the event that you are unable to pay them, you may find yourself filing for bankruptcy.

For more information about leveraged debts and bankruptcy, contact the Austin bankruptcy lawyers of Slater, Kennon & Jameson, LLP.

Joseph Devine

Many people want to play on the stock market in hopes of making the magical selection that will provide them with lots of disposable income and make all their dreams come true. Although it might seem like the stock market is a place where you get thousands of dollars in return for a small investment, there are actually a lot of very complex processes and equations that go into determining who makes money, and who does not. More often than not, naive investors will sink all their money into one prospect only to have it shudder and die within a few months. Not all investing is created equal, and if you want the best dividends, you need to understand how the process works and what to look out for.

The first thing to understand is exactly what dividends are. When a company goes public and starts to trade its stock on the big boards, they begin to take on public shareholders. These shareholders can be investment firms, banks, or normal people that are interested in gaining something back on their money. In a certain sense, these people become partial owners of the company, and when the company does well, it usually rewards them for their initial investment. When a successful company turns a profit, it has the option of distributing percentages of these profits to its shareholders, and when it does, these shared profits are known as dividends.

Many people think that dividends are the fastest way to see a return on your investment without really having to do anything, but it’s important to remember that there are many different ways in which the market and the price of the stock can affect the dividend you do, or do not see. When thinking about getting involved in this type of investing, you must take care to consider the payout ratio very carefully. Many companies will try to attract investors with ratios that sound too good to be true, and they usually are. Anything over sixty five percent is a ratio that you should probably stay away from.

In the first couple of years, it’s important to remember that the best thing you can do with your dividends is reinvest them. Unless something unusual happens, they probably won’t be huge amounts of profit for you anyway, and you can strengthen your portfolio consistently if you allow those dividends to continue working for you in the open market.

Ready to get started? Learn more about investing and dividend yield at http://www.DividendYieldLive.com today!

Why should you want to buy silver at $15 an ounce when you can wait for silver to go down to $12 an ounce. The simple and realistic answer is the supply of silver decreases with time. Trying to wait for low prices will negatively affect your ability to buy the quantities you want. Buying on a cost average method allows a consistent accumulation of silver.The short term price you pay today will be considered a bargain in the future.

If you could flash forward one year and look at the price you paid for silver today, you will realize that the price you paid last year was a bargain. Making small changes in your spending profile can benefit you greatly. Do you purchase cigarettes on a regular basis? Consider this, once purchased your cigarette purchase is destroyed upon use. You will get a one time value from each cigarette. But to repeat the experience you will have to give away more money. With the regular purchase of silver, whether weekly or monthly, you have a product that lasts year after year after year.

If you take the same amount of money that you spend on pampering yourself and buy silver you increase your real wealth. Forget about that daily cup of gourmet coffer and buy yourself an ounce or two of silver.

Become part of or start a silver investing club. Most silver brokers buy from wholesale sources. Leverage the power of group buying to negotiate purchase rates that are fair and favorable to your silver investment club. Silver brokers work on commission. Do not overlook the power of negotiating. Make sure you have a plan a and an plan b. If your club plans to purchase more than $1000 in a single transaction ask for a discount. If your club purchases $2500 or more in a single transaction ask for a larger discount. Another advantage of a group membership is that you can be more productive with 100 people giving one percent of effort than 1 person giving 100 percent of their effort. Their is strength in numbers.

If there are no clubs in your immediate area then look at the penny saver magazines of surrounding communities. If you have to start your own club run an ad in the local newspaper or penny saver magazine. An example ad would be: Investment club forming. initial investment under $50. Automatic monthly purchases to acquire precious metals. Call telephone xxx-xxxx. Place your ads under the business, financial, and personals section of the penny saver publication. Of course, this technique will work just as well with the local newspaper.

You can also post advertisements in the form of flyers. These flyers can be put on public bulletin boards. Convenience stores, food stores and churches are excellent places to advertise. Just make sure you get permission first. And sometimes you do not need permission.

Look at your bank account and tell me if you are getting a fair return on the money you loan to the bank. If not you need an equalizer to develop you wealth. Using your paper money to acquire real money protects your economic standing. Your best friend when it comes to your finances is you. Be proactive in managing your assets.The systematic acquisition of silver coins can be painless. You have alternatives to starting a silver club. For a more direct and systematic way to own silver consider joining already established silver clubs.

Watch the current trend in owning precious metals. Do what the smart money movers are doing.The possibility of silver prices skyrocketing to three digits may not be far away. Consider this, the fiat currency you have in your savings account is being inflated away on a continuous basis. Acquire real wealth now. Buy silver because the price will surely increase.

Thank you for reading my article. Please read my other articles. For more information on investing in silver click on the link below to American Eagle Silver Dollar..

Ronald Roberts is a former Army Officer and MPA graduate. His many interests include public administration and academia. His favorite quote: Never despise a humble beginning. His blog is http://www.americaneaglesilverdollar.info.

In order to get started investing you just need some willingness to learn and apply sound, proven to work principles. You can get started immediately without having much investment wisdom at all about the stock market or other investment instruments. When you begin investing you should be a conservative-moderate investor with a relatively low risk tolerance. This way you will have a way to grow your money with little risk, while you learn more about investing. However, a general rule of thumb in long-term investing is that the younger you are, the more risk you should take and aggressive you should be. However, this considers that you have performed your due diligence, have learned enough about all of your options, and properly assessed your investor profile.

One very easy first investment you can make would be an interest bearing savings account, chances are good you already have one. If you do not have one of these accounts you should; they can be opened with usually only $100, sometimes even less. A savings account can be opened at the same bank that you do your checking at, or at any other bank. One good idea may be to open this interest bearing savings account with an on-line bank that has no physical location near you, this way it forces you to keep the money in the account longer and make less frequent withdrawals. One of these types of interest bearing savings accounts should yield 2 – 4%.

Another good option you have when starting investing is to invest in money market funds. Money market investments can be made through nearly any bank. These funds have higher interest payouts than typical savings accounts, and they work much the same way. Money market accounts are also short to medium-term investments, because of this your money will not be tied up for a long period of time and still appreciate in value.

Certificates of Deposit are also investments with very little to no risk. Interest rates on C.D.’s are normally higher than those of savings accounts or Money Market Funds. You have the option to select the duration of your C.D. with interest paid regularly until the maturity (duration end) date. Another pro about C.D.’s is that they are insured by the bank and governmental agencies.

Other options for you to choose when first starting investing are treasury securities (low risk), bonds (low to medium risk), mutual funds (low to high risk), and exchange traded funds (low to high risk). However these options require more due diligence than those mentioned in the previous paragraphs, and the latter of these options (mutual funds, ETF’s) generally have more risk as they are related to stocks.

When just starting out, any one of these options above are great beginning points for delving into investing. All of these options will allow your capital to grow for you while you learn more about investing in other, higher yielding (higher risk typically) investment opportunities.

*Note: An excellent resource for checking saving account yield rates is Bankrate.com

Author: William Lemerond, Financial Advisor & Investment Manager Website: http://www.SLEYCapitalAdvisors.com

SLEY CAPITAL ADVISORS L.P. is a fee-only and independent financial advisory services firm servicing all of southeastern Wisconsin. Our flexibility when it comes to developing your investment or financial plan means you receive the utmost comfort and satisfaction with your finances. Visit our website to review our distinguished philosophy and process. We also offer a FREE Report with great investment advice and strategies, so visit the site to opt-in for free. Also, for free daily “Seedlings For Your Healthiest Money Tree” please visit our Blog: http://www.sleycapitaladvisors.blogspot.com.

You may be thinking about investing your money into bonds. These are viewed as being less risky than the share market, as companies or governments guarantee them. Government bonds are seen to be the most secure of all bonds, as it is more likely that a corporation could go bankrupt before the government. When you take out a bond, you are actually loaning money to that organization or government entity and they will pay back to you your initial investment plus the additional money you earn for lending them your money. Make sure that you consider what is the best investment for you situation.

Treasury bonds are possibly the most common bonds you have heard about. These are in the news a lot as the Uncle Sam is raising money to bail out the economy from the recent financial crisis. These are long term so you need to be prepared to invest your money, most likely for more than 10 years. This type of investment is viewed as one of the safest that you can make. These bonds are sometimes called T-Bonds. Similar to treasury bonds are agency bonds. Agency bonds are issued by U.S. Government agencies. These bonds are not viewed as being as safe as treasury bonds are. Although these are backed by the U.S. Government they are not guaranteed by the U.S. Government, unlike the treasury ones which are guaranteed. Another type of these are municipal bonds. These bonds are issued by state, local or city governments to raise funds to provide services to the community. These services include roads, schools, community centers and many more. The good thing about these bonds is that are generally exempt from taxes on the interest they earn and your investment is providing worthwhile services to the community. These investments are secure, possible to the same extend that the agency ones are.

Corporate bonds are issued by private companies to raise cash. These bonds are not as safe as the government ones, so they will normally offer higher returns to make them more attractive to invest in. The zero-coupon bonds offer no interest (or coupons). You may think well why would you invest in these? The reason is that these are sold at a significant discount to what they are valued at. This means when they mature you get the value price when you sell them not what you paid for them, which can mean a huge profit to you. The final type is very well known, it is the junk bond. This is known for giving higher returns or losing all you money, hence the name junk. This type is only those who are willing to take the high risk of losing everything, with the chance to get high returns instead.

Tom has been writing for many years now. Not only does this author specialize in financial matters, you can also check out his latest web site at http://braunpowermax.com/ which reviews and lists the best Braun PowerMax MX2050 blenders for your kitchen.

A very short introduction: When you make an investment you need have your money back -a return of your money or ROI- in a given frame of time and Christmas can give you the opportunity for accomplish this interesting adventure. Relax and read carefully these advices about how to invest during Christmas.

Go ahead: When it comes to invest your money, always you can find several smart ways to get the most out of your personal finances in order you can live better during the forthcoming months or even years. Christmas season as well as Saint Giving is an excellent time to make business and make some profitable investments. In this article I am not only want to talk about how to save money -which is something most people explain- but how you can increase your earnings through gaining some interests of your own funds. We should consider we are slowly returning from times of recession and it is very important now that financial situation has some relief -general economy system more dynamic in relation with last year 2008- you can invest your money during Christmas season. The following are some important ways you can invest your money at some point in this holidays.

1. Buying homes or in real estate market: Everybody knows that in most places of the world -mainly in those where financial crisis affected severely- real estate business is a wonderful opportunity to make a good money. Homes and all kind of properties are gaining more value -they are really recovering its value- and that’s why you can buy a home or an apartment and in just 6 months you could obtain up to 20% of its value. This is a great time for that and I personally think you could get the most out from it.

2. Why don’t try with CD -Certificate of Deposits? Certificate of deposits is a real good way to invest your money during this season. You could agree an amount and a period of time to get back your money and monthly you will get revenue from your own money.

3. Saving accounts with high interest rates: Saving accounts is a very secure and good way to invest your money during Christmas. Evidently, you should decide if CD or saving accounts is best for you. I recommend certificate of deposits because you could have a larger benefit but this is also a good way to invest your money.

4. Learn everything you can about FOREX: This is a buzzword today and there are several online opportunities to invest your money starting with US$50 or even less. If you practice you could receive several benefits from it.

5. Companies needing an initial investment: Companies from different places around the globe could need people that a make some association. If you consider you can invest, it could be a good way to get back your money and its profitability very soon.

6. Buy and sell Christmas gifts through the Web: This is a good business that you should consider because everybody purchases several things during Christmas.

7. Start a temporary business selling Christmas related items: A temporary business is a good way to invest your money and administrate it by yourself and then, get a good benefit from it.

Christmas Savings

When your portfolio is spiraling down and you are running out of time to make up those losses, people start to look for the next sure thing. The problem is that there is always some risks with every investment. Many are turning to investing in a fixed immediate annuity as a portion of their portfolio that they know they can count on for a income. Let’s review the 5 factors to consider for guaranteed income:

1. An immediate fixed annuity is an insurance contract. You give the insurance company a lump sum and in return they give you a fixed monthly (or quarterly or annually) payment. A deferred fixed annuity defers guaranteed income to some point in the future. The risk is that you hope the insurance company will still be around and solvent to pay you.

2. With an immediate fixed annuity, you get payments right away. Once you annuitize (take money out) there is no going back or changing your mind. The risk is that you hope you live long enough to recoup all of your initial investment.

3. Annuity holders pay interest only on the interest portion of the payment when received. The other portion is return of capital and tax free. Even though your payments are guaranteed, your risk of inflation reducing your purchasing power is high. Therefore, you should only have a portion of your assets in an annuity.

4. According to Beacon Research, top interest rates on fixed annuities can range from 4.75% to 5.40% which compares with yields of 2.81% on a five-year certificate of deposit or 2.95% yield on a 10 year Treasury note. Rates fluctuate so look at online calculators to help you compare current rates.

5. Fixed annuities are not as costly as variables. Watch out for additional, embedded fees and greater life-expectancy assumptions that will make the payout quote different from each company. It may be a no-load (no commission paid) contract but that doesn’t mean you are not paying internal expenses.

The average 65-year-old will live an additional 17.8 years. Many of us will live much longer. Investing in a fixed annuity or an immediate fixed annuity can be a great addition to a portfolio that already has a cash savings account, and some bonds or bond funds. Consider the steps above for a guaranteed income for life.

2009© Fern Alix-LaRocca CFP® All Rights Reserved

Fern Alix LaRocca is a Certified Financial PlannerTM and Wealth Coach with over 24 years experience as a fee-only Financial Advisor.

There are many options available when it comes to investing hard earned money. Let’s look at some of the alternatives and how they stack up against each other.

First, an ultraconservative approach would be to lock up a stock pile of cash in a safe or in a safety deposit box at a bank. The money might be safe from market fluctuations but is it really safe? Obviously there is no interest being earned. Actually the value of the money would be declining when the rate of inflation is factored in.

Another alternative is to put the money into a bank CD. At the time of this writing, bank CD’s are paying an interest rate ranging from.57% to 1.59% for a 6 month CD and.5% to 2.09% for a 1 year CD. Using the rule of 72 to determine how long it will take to double an investment and figuring on the highest rate of 2.09%, it will take 34.4 years to double an investment placed into bank CD’s. This is without factoring in rates of inflation. Once inflation is considered the actual return on investment is most likely negative.

Investing in the stock market is another option. This investing strategy puts money at risk without any recourse. If the stock market goes down, the individual investor has no security to protect the initial investment. However, a good and calculated investment may offer high yields. Historically from 1926 to 1999, the common stocks of the S&P 500 have had an 11.3% rate of return. However the S&P 500 performance for the last 5 years, as of Oct. 31, 2009 has only been.33% according to Standard and Poors. The volatility of the stock market is not for the faint of heart when it comes to investing hard earned money.

Real estate is the option that this author likes most. Real estate is a hard asset and the investment is backed by this asset. However not everyone is of the mind set to be a landlord or to deal with the day-to-day activities required in the process of buying, renting and selling real estate. There is hope for those investors looking to invest money in the real estate market without the need to be intimately involved. This is accomplished through investing in real estate via private lending.

Private lending in real estate is when one individual lends another an amount of money to execute a real estate transaction. The investor is then given a promissory note and a mortgage as security protecting their investment. A typical rate of return in this scenario is between 8 and 12% and in most cases this rate of return is constant throughout the length of the investment. Using the law of 72, a 12% return will double in value every 6 years. The constant rate of return is one of the reasons this type of investment is so attractive.

Due diligence is required regardless of the investment. When evaluating Bank CDs, determine the viability and health of the bank even though CDs are protected by the FDIC. The financial health, balance sheet and debt position of companies should be analyzed when considering stocks. Finally, the loan-to-value, appraisal and rental rates for real estate should be verified when considering a private loan.

Brett Lewis is the founder of http://www.BlackLabelRealty.com the online leader for real estate investments in the Lehigh Valley, the #1 provider of real estate solutions for home sellers & buyers in the Bethlehem, Allentown and Easton, PA. Brett has been involved in real estate investing since the 1980’s including property management, renovations, rehabs, wholesale deals, short sales, land development and commercial transactions.